Here, Kitty Kitty…
Caterpillar has put together
a respectable rally over the past few days. However, as I look at the longer-term
picture, it has been in a steady downtrend for the past three months. During
that trend there have been two countertrend rallies. The first one was 5.2 points,
and the second was 4.3 points. Currently, we are at 4.2 points on this rally from
the June 24 low.
(
CAT |
Quote |
Chart |
News |
PowerRating) is facing a key Fibonacci price resistance zone from
50.08-51.80. This zone has 8 price levels. Clearing this zone to the upside would
potentially be a signal of a larger corrective move to the upside or new uptrend.
However, if CAT can not clear this zone, I’m interested in a possible short swing
trade. If triggered into this trade, my stop could be at the swing high made into
this resistance zone or the initial stop could be placed just above the 51.80
level. This depends on your money management rules. Now that we have the key decision, let’s see which direction this (CAT) jumps.
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